I believe it is my responsibility to share key conclusions from my four and a half years’ experience as Member of the European Commission – lessons from years of financial and economic crisis that was unprecedented in EU history and that should never be repeated.

Europe has been going through two crises and not one. The first we shared with the rest of the world, while the second one specifically originated from the inherent weaknesses of the current EMU architecture and brought us on a different path than the rest of the industrialised world.

Debts from financial markets were replaced by debts from official sources, which turned the euro zone into a club of debtors and creditors, set against each other.

The elected governments of Greece and Italy were replaced with technocratic administrations as the democratically elected ones were unable or unwilling to implement front-loaded fiscal consolidation.

From a fragile recovery we entered a double-dip recession in 2011. This became an existential crisis of the monetary union, and of the EU as a whole.

While Europe went into a second recession in 2011, the US economy was already steadily growing because the US had relevant instruments in place and the US Government and central bank did not hesitate to use them to generate growth and jobs.

The EU only started to emerge from the financial whirlpool when the ECB announced that it would be ready to act as a central bank in a crisis. In short, the sovereign debt crisis of the past four years has shown us that without a lender of last resort, a central budget or a co-ordination framework geared towards stimulating aggregate demand, EMU has been – at best – a structure for fair weather, but not for a financial and economic crisis.

The euro has also been a trap, because Member States can no longer adjust to economic shocks through tailor-made monetary policies and devaluation in their exchange rate, while at the same time being subject to strict rules on fiscal policy.

This means that instruments that were historically used to limit the social impact of crises were not available any more, while there has been nothing newly introduced to replace them.

The point is that macroeconomic instability in Europe stemmed predominantly from the incomplete design of the Economic and Monetary Union: troubled countries could not unilaterally devalue, could not call upon a lender of last resort and could not count on any fiscal support from other Member States that would enable them not just to survive but to stimulate economic recovery.

The only mechanism through which troubled countries inside the EMU have been able to restore economic growth is so-called internal devaluation, i.e. cost-cutting in both the private and public sectors by shedding labour and reducing wages. Internal devaluation has resulted in high unemployment, falling household incomes and rising poverty – literally misery for tens of millions of people.

Moreover, it is a recipe that cannot be applied in many countries at the same time because it undermines overall demand. If many countries cut their wages and lay off workers, nobody wins in terms of relative competitiveness but everybody loses.

At a time when Europe would need to invest significantly in its human capital in order to cope with the growing demographic challenge, we have allowed a financial crisis to push millions of people out of work and into poverty. This has damaged Europe's economic potential and social cohesion for many years to come.

The proposal was in fact that regions with a current account surplus should contribute and deficit regions should draw down funding, as normally happens within nation states, so that social cohesion and aggregate demand could be maintained.

Did Helmut Kohl, François Mitterrand, Jacques Delors and other founding fathers of the EMU not understand that the incomplete structure they were setting up would be prone to crises? Was it not reckless for them to launch an irreversible monetary union without a proper fiscal pillar? Did they not care about the possible social consequences of macroeconomic adjustment based predominantly on internal devaluation?

In fact, political leaders in the early 1990s were far from ignorant about the importance of social cohesion, but they believed that it could be essentially achieved through legislation and social dialogue.

As the Single Market was being constructed since the mid-1980s, an important body of labour law was developed. For Jacques Delors and other leading politicians at the time, the social dimension of the Single Market and of the EMU was predominantly about preventing a race to the bottom in employment and working conditions.

On the one hand, we introduce social legislation to improve labour standards and create fair competition in the EU. On the other hand, we settle with a monetary union which deepens asymmetries and erodes the fiscal base for national welfare states.

Social legislation cannot make up for the absence of a euro zone budget or a genuine lender of last resort. Delors' idea of Social Europe is unfortunately offset by Delors' model of the EMU.

That is not to say that the EMU was fundamentally unfair at the time. To borrow a famous metaphor, EMU may have well been designed behind a veil of ignorance (Schleier des Nicthwissens). Nobody knew exactly how well the euro would work for any particular country.

However, it is quite clear today that EMU’s functioning in practice has not been fair. We know now that the EMU contains an inherent bias towards internal devaluation as the prevailing if not the only mechanism of adjustment to economic downturns. With such asymmetric allocation of costs and benefits, the EMU is not functioning well and its sustainability cannot be taken for granted.

In the history of the European Communities, two attempts at monetary cooperation have already broken down because the system was not resilient enough. The existence of a single currency in itself should not be seen as a sufficient guarantee against such a breakdown to happen again.

The EU cannot live together for too long with the risk of monetary breakdown, which also would bring with itself social and political breakdown. If our Economic and Monetary Union is meant to be irreversible, it must also be fair and it must be based on solidarity. Either we give up the dogma of ‘no fiscal transfers’ in the EMU, or we give up the European Social Model